No Navigator, No Parachute, No Problem: Flying Solo – April 2014

It’s the first of the month, and you know that that means: time for more numbers!

As usual, here’s a bit of context to go with the data:

This month’s numbers are skewed a bit thanks to taxes. As a small business owner, I have to withhold my own taxes from my net income. I hadn’t been doing a good job of that during the first three months of the year; in fact, I had only withheld $1,790.00 before April. After doing the math, I realized that my net income for the first quarter meant that I was going to owe around $4,000.00 to Uncle Sam for that period. So, that meant taking out an additional $2,210.00 this month, adding it to the $1,790.00 I’d already set aside, and paying it all to the IRS.

Additionally, I decided to use my large surplus from March to take care of a few things, one of them being the last big one-time startup cost I have: a sign. Yes, until now, I haven’t actually had anything outside my building with my name on it. That issue has been corrected with a nice, custom wood sign by a great local company. I also spent $500.00 to be a corporate sponsor for a state agency’s huge regional training event later this month. This agency is filled with professionals that are great potential referral sources, so I figured having my presence there would pay off. I also used the surplus to make larger payments on my business credit cards than usual, as well as pay myself an extra $500.00 at the end of the month. Like L’Orēal says, I’m worth it.

Having said all that, here’s April:

Clients

Referral from former pastor: 1

Referral from other attorneys: 4

Referral from local bar’s lawyer referral service: 1

Total clients: 6

Expenses

Advertising: $500 (corporate sponsorship)

Office supplies (including payments to business credit card): $700

Rent: $550

Court costs and other client costs: $1,082.57

Lawyer Referral Service referral fee: $200

New sign: $437.50

Malpractice insurance: $76.51

Total expenses: (roughly) $3,547.00

Income

Earned: $6,825

Retainer: none

Net income: approx. $3,278

Taxes

Amount withheld this month: $2,210

Amount previously withheld: $1,790

Total taxes paid or withheld: $4,000 (paid to IRS)

Paychecks

One paycheck of $1,500

One paycheck of $2,000

Total paychecks: $3,500

Analysis: In summary, I didn’t quite break even in April. My expenses were high, plus taxes hit like a ton of bricks. Just from looking at the numbers, the month seems terrible (especially compared to the jackpot that was March). However, there are a number of things to take into account here: dipping into my surplus to pay extra expenses, my sign, an unusually large amount of court costs and other client fees (some of haven’t yet been reimbursed for), withholding taxes for multiple months, a large tax payment, and the fact that I won’t receive payment from of a couple of April’s clients until May.

It’s also important to note that March’s numbers were inflated somewhat, due to two of my clients from that month being a specialized type of case that I charge more for handling than I do for handling any other type of matter. In April, I didn’t have any of those types of cases; however, both of those cases resolved favorably a few days ago, so I’m starting to put the word out that I’m the go-to guy for those and hopefully more will start coming in.

Taking all of that into account, I’m actually okay with how April turned out. As I’ve said, it was a weird month, but if my client intake continues at a steady pace, normalized expenses in the months ahead should lead to steady growth.

Thanks for flying with Solo Airlines this month, and as always, leave your questions or comments below or shoot me an email at florida_esq@outlook.com. I’ll see you again in June, provided the patented Florida Heat n’ Humidity combo doesn’t kill me first.

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One comment

Spending money on advertising sucks, but it can help. We sponsor events as well and find it to be the best ROI we have had with our advertising budget. Outside of branded materials (pens, coozies, etc.) it’s become almost exclusively our only form of paid advertising.